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Supreme Court seeks response from Finance Ministry, SEBI to ensure investor safety on Adani Fall

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Published on: 11 February 2023 at 10:48 IST

Supreme Court raises concern over Adani Group and Hindenburg Research Row.

Supreme Court sought a response from the Ministry of Finance and the statutory market regulator, SEBI on how to ensure that Indian investors are protected in future against sudden volatility, after taking note of a recent market crash in the wake of a report by US short-seller fim Hindenburg Research on the Adani Group.

Supreme Court bench headed by Chief Justice of India DY Chandrachud sought a response from the Centre and the Securities and Exchange Board of India (SEBI) on the existing regulatory framework and the need for putting into place a robust mechanism to protect investors.

Supreme Court was hearing two petitions related to the Hindenburg report. The court, while listing the matter for Monday, asked SEBI to apprise it on that day of how to ensure that investors are protected in future.

It asked SEBI to show the existing structure and sggest ways to strengthen the regulatory framework. The bench also suggested the need to form a committee of experts from various areas such as securities, international financial law experts, and someone from the regulatory body, led bya former judge.

The apex court also suggested that the regulatory body could think of ways to modify statutory regulatory provisions in such a way that in the future, Indian investors could be protected from market shocks and meltdowns.

The court clarified that this is an open dialogue to ensure Indian investors are protected and that they are not on a witch-hunt. The court also noted that the current stock market is no longer like the 90s, where the market was the exclusive domain of the rich.

Supreme Court noted that these days, the stock market is also a wide area for middle-class investors.

Appearing for SEBI, Solicitor General Tushar Mehta submitted that the country’s statutory market regulator is on the ‘top’ of the situation. One of the petitions filed by advocate Vishal Tiwari sought to constitute a committee under the supervision of a retired Supreme Court Judge to investigate the Hindenburg Research report.

Another petitioner, advocate ML Sharma, sought a probe against the American short-seller, whose report led to shares of Adani group plunging on the bourses.